BSkyB today confirmed that it has finalised the deal to buy Virgin Media Television, which operates channels including Living, for up to £160m in cash.

Sky will pay £105m up front on completion of the deal, with the remainder to follow completion of the regulatory process. The acquisition will need to be cleared by competition regulators in the UK and Ireland.

The pay-TV company is buying VMTV's portfolio of subscription channels – Living, Livingit, Challenge, Challenge Jackpot, Bravo, Bravo 2 – and Virgin1, which is available on digital terrestrial TV service Freeview.

Sky Media will also take over selling advertising airtime on VMTV's channels from Virgin's sales house, IDS, in January 2011.

As part of the deal, Virgin Media has secured new long-term carriage agreements for its cable TV network for wholesale distribution of Sky's basic subscription channels, including Sky1, Sky News and Sky Arts, and the services it is selling.

The new carriage deals are understood to be for up to nine years. Previously the carriage deals tended to be struck every three years.

For an incremental wholesale fee, Virgin Media will also for the first time have the option of carrying any of Sky's basic HD channels, Sky Sports HD 1 and Sky Sports HD 2, and all Sky Movies HD channels.

Content from Sky's basic and premium channels and the VMTV services will be available through Virgin Media's on-demand service. Virgin Media will also have access to Sky Sports' red button interactive coverage and be able to deliver some Sky programming over the internet.

Jeremy Darroch, BSkyB chief executive, said: "VMTV is an attractive investment opportunity which complements our existing content business and delivers strategic and financial benefits. We are pleased that, through commercial negotiation, we have been able to ensure wide distribution of our channels to a growing pay TV universe."

Neil Berkett, chief executive of Virgin Media, added: "The sale of our channels business has generated substantial value. Together with the new commercial agreements we've announced today, it will allow us to focus more closely on our strategy of exploiting Virgin Media's super-fast connectivity to offer our customers a range of the very best content through a highly versatile next generation entertainment application."

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